Understanding Cheap Oil
Here’s an interesting take on the oil price crash in The Wall Street Journal, showing how things have changed, in seven charts. In the last year, the price of a barrel of crude oil has fallen to nearly half the price that it was.
The number of oil rigs has fallen precipitously in the last year, from roughly 1,600 to 800, due to high supplies. Even with fewer rigs, the chart shows production of crude oil is still way up in recent years. And the story shows how the price of a gallon of regular unleaded gasoline fell sharply since mid-2014, though it’s risen slightly in recent weeks. The story also touches on the strong dollar, as well as petroleum’s contribution to the U.S. trade deficit. It’s a good read, check it out here.